News & Updates

October 28, 2015

Congress’s Plan For Protecting Investors: Protecting Wall Street

Time, by Ian Salisbury

Here is what’s happening: Many Americans assume that working with a financial adviser means they will receive unvarnished advice, the same way they would from lawyer. As it happens, many financial advisers that earn commissions rather than fees don’t do this at all. They are essentially brokerage salesmen, free to peddle whatever investment products offer them the highest payouts, so long as they are suitable for customers based on factors like investors age and risk tolerance.  For years, the Securities and Exchange Commission and the Department of Labor, which has jurisdiction over retirement plans, have taken turns trying to correct the problem by implementing a new, tougher set of rules, known as the “fiduciary standard,” across the entire industry. But many on Wall Street are dead set against it. Those commissions are lucrative and some brokers that rely on them fear they could be forced out of business.  Of course, as [Morningstar’s John] Rekenthaler points out, big Wall Street firms understand they can’t just come out and say they’re worried about their bottom lines. So instead they argue the rule will make it hard for them to serve their customers. Presto: It’s no longer the “Wall Street Profit Protection Act.” It’s “The Retail Investor Protection Act.”  … [D]on’t be fooled. The bottom line is that many in Washington think the best way to serve you is to first serve Wall Street.

Read full Time article by Ian Salisbury here.


Category: Blog, Media Coverage